MANUBEN NATVARBHAI BHALIYA,SURAT vs. ITO, WARD-2(2)(1), SURAT

आयकर अपीलीय अधिकरण, सूरत न्यायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.1409/SRT/2025 (Assessment Year: 2015-16)

Manubhai Natvarbhai The Income Tax Officer, Bhaliya, 22 Pachhalu Faliyu, Circle-2(2)(1), Navagam 6 TA. Kamrej, बनाम/ Surat Surat Vs. (Appellant / Assessee) (Respondent / Revenue) PAN: CAGPB1984A Assessee by Shri Mayank A. Ogrivala, CA Revenue by Shri Ashish Kumar, Sr. DR Date of Hearing 09.07.2026 Date of Pronouncement 16.07.2026

O R D E R Per B.M. Biyani, AM:

Feeling aggrieved by order of first appeal dated 25.10.2025 passed by learned Commissioner of Income-Tax (Appeals)-National Faceless Appeal Centre, Delhi [“CIT(A)”], which in turn arises out of assessment-order dated 24.04.2023 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 147 r.w.s. 144 & 144B of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2015-16, the assessee has filed this appeal.

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2. The background facts leading to present appeal are as under:

(i) The assessee-individual filed her return of income of AY 2015-16 declaring a total income of Rs. 14,840/- u/s 139 which was duly assessed.

(ii) Subsequently, on the basis of information in his possession revealing that the assessee alongwith other co-owners sold immovable property whose capital gain chargeable to tax had escaped assessment, the AO issued initial notice dated 21.06.2021 u/s 148 to re-open assessee’s case u/s 147 on the strength of the time-limit extended by The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [“TOLA”]. Since a new set of provisions for re-assessment u/s 147 was introduced in Income-tax Act w.e.f. 01.04.2021, there arose controversies with regard to the issuance of notices u/s 148 after 01.04.2021 and the litigation travelled to Hon’ble Supreme Court in Ashish Agarwal (2022 SCC Online SC 543) in which the Hon’ble Supreme Court gave certain directions. Accordingly, after considering the decision of Ashish Agarwal, the Ld. AO issued a fresh notice dated 21.05.2022 u/s 148 to assessee for making assessment u/s 147 [after completing the procedure of section 148A(d)], which culminated into passing of an order of re-assessment dated 24.04.2023. By this order of re-assessment, the Ld. AO re-assessed assessee’s total income at Rs. 44,63,090/- after making an addition of Rs. 44,48,250/-.

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(iii) Aggrieved by aforesaid order of re-assessment, the assessee carried matter in first-appeal but did not get any success.

(iv) Now, the assessee has come in next appeal before us.

“1) On the facts and circumstances of the case, as well as law on the subject, the notice issued u/s 148 of the Income Tax Act is invalid and without jurisdiction, being barred by limitation as prescribed under section 149 of the Act, and hence the entire reassessment proceedings are void ab initio and liable to be quashed. 2) On the facts and circumstances of the case, as well as law on the subject, the learned CIT(A) erred in rejecting the additional evidence produced by the appellant despite existence of sufficient cause for non- production of the same before the learned Assessing Officer. 3) On the facts and circumstances of the case, as well as law on the subject, the learned CIT(A) erred in treating the rural agricultural land sold by the appellant as a capital asset and in applying section 10(37) instead of section 2(14) of the Income Tax Act, 1961. 4) On the facts and circumstances of the case, as well as law on the subject, the learned Assessing Officer and the learned Commissioner of Income Tax (Appeals) erred in applying section 50C of the Income Tax Act and sustaining addition of ₹14,50,250/- without following the procedure prescribed under section 50C(2) of the Act. 5) On the facts and circumstances of the case, as well as law on subject, The Appellant is eligible for deduction of indexed cost of acquisition from the sales consideration. 6) On the facts and circumstances of the case, as well as law on subject, Computation of Income made by the learned assessing officer is totally wrong and it's not matching with the order passed by the learned AO and therefore Demand raised by the learned AO to the tune of Rs. 27,97,896/- is erroneous.” 4. We have heard learned Representatives of both sides and perused the case record.

"19. (f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020." 6. Ld. AR for assessee submitted that following the above decision of Hon’ble Supreme Court in Rajeev Bansal, the Hon’ble Gujrat High Court has also quashed the notices issued by assessing authorities u/s 148 in (i) Mayur Kumar Babubhai Patel Vs. Assistant Commissioner of Income-tax (2025) 176 taxmann.com 25 (Gujrat) and (ii) Sorathia Mahesh Veljibhai HUF Vs. Income-tax Officer (2025) 179 taxmann.com 54 (Gujrat). The relevant paras of Sorathia Mahesh Veljibhai are re-produced below:

“8. The matter was carried to Hon'ble Supreme Court. Hon'ble Supreme Court in case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC) decided the issues raised with regard to delay as per the provisions of section 149 of the Act which has come into operation after 01.04.2021 as well as validity of sanction granted under section 155 of the Act.

"15. Considering the facts of the case, it is not in dispute that the respondent-Assessing Officer has issued the notice under section 148A(b) of the Act after the period of six years were over on 31.03.2022. As observed by the Hon'ble Apex Court in case of Deepak Steel and Power Ltd(supra) and in view of the concession made by the Revenue before the Apex Court for the Assessment Year 2015-16, all the notices issued on or after 01.04.2021 will have to be dropped as they would not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and therefore, nothing further is required to be adjudicated in the matters as the notice so far as the present petitions are concerned, though dated 31.03.2021, admittedly have been issued after 01.04.2021. 16. It is also not in dispute that the notices under section 148A(b) have been issued pursuant to the decision of the Hon'ble Apex Court in Ashish Agarwal (supra) dated 04.05.2022 admittedly after 31.03.2022. Therefore, on both counts, the notices issued under section 148 of the Act dated 27/28/29.07.2022 would be time barred." 17. In view of above, for the foregoing reasons, the petition is allowed. The impugned notice issued under section 148 of the Act for Assessment Year 2015- 2016 is held to be invalid as same was issued during the extended period from 01.04.2021 to 30.06.2021 under TOLA. 18. Petition is accordingly disposed off.” 7. Thus, we find that the issue is no longer res integra. The Hon'ble Supreme Court in Rajeev Bansal (supra) has recorded the Revenue's concession in para 19(f) that all notices issued on or after 01.04.2021 for AY 2015-16 are liable to be dropped. Further, the Hon'ble Gujarat High Court in Mayurkumar Babubhai Patel (supra) and Sorathia Mahesh Veljibhai HUF (supra), following Rajeev Bansal and Deepak Steel & Power Ltd., has held that notices issued after 01.04.2021 for AY 2015-16 are barred by limitation. Admittedly, in the present case, the original notice u/s 148 was issued on 21.06.2021 and the consequential notice after the decision in Ashish Agarwal was issued on 21.05.2022. Therefore, respectfully following the aforesaid binding precedents, we hold that the impugned re-assessment proceedings are barred by limitation and without jurisdiction. Hence, the impugned re-assessment order passed by Ld. AO in present case is hereby held to be bad in law and quashed. Ground No. 1 raised by assessee is thus allowed.

Order pronounced in open court on 16/07/2026

Sd/- Sd/- (SUCHITRA KAMBLE) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER

दिन ांक /Dated : 16.07.2026 * a.k. Copy of the Order forwarded to:

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